ASX 200 finished up 3 points to 6652 on bargain hunting after early losses. US futures up 54 points. Mixed markets today with miners doing well as buyers return on trade optimism, BHP rallied 0.55% and FMG up 0.4% but banks were slightly weaker before a late rally pushed the sector into the green led by CBA up 0.2%. In the industrials, TWE down 11.8% as the CEO announced retirement plans and the BNPL again under pressure with Z1P -4.8%, EML down 2.8% and APT down 3.3%. Bond proxies and TLS rose with the telco up 0.6% and TCL up 0.3%. Tech stocks were hurt by WTC which was once again under attack from J Capital and was suspended again following round 2 from the research house after a 12.3% fall. In other corporate news, SWM rose 11.7% after selling its Magazine business to Bauer for $40m. 10-year bond yields are creeping higher now 1.15% and the AUD higher too at 68.62c. Asian markets better with Japan up 0.3% and China up 0.3%.

Todays Highlights

• ASX 200 up3 to 6652. Waiting for Boris. Again.
• High 6649 Low 6612. Good volume.
• Banks turn positive. Miners buoyed.
• CSL slips. WTC crashes.
• Bond proxies firm.
• AUD higher at 68.62c
• GBP/AUD still 1.88
• 10-year yields up to 1.10
• Aussie gold falls to $2171
• Bitcoin rises to US$8226
• US futures up 54
• Asian markets mixed with Japan up 0.3% and China down 0.6%

STOCKS

• WTC -12.33% Round two kicks off. Trading halt.
• NCK +5.01% bargain hunters sofa.
• LYC +2.77% production numbers
• KPO – trading halt capital raising.
• SWM +11.69% sell Pacific Magazine.
• TWE -11.83% CEO to retire.
• PET -7.85% downdraft continues.
• APT -3.34% EML -2.78% Z1P -4.83% BNPL under pressure.
• OZL +2.75% broker upgrade.
• IOD +30.43% ASX query.
• WOR -1.40% guidance unchanged.
• MLX +18.92% proxy advisers’ response.
• RAP +5.26% still creeping higher. Techknow conference to come.
• BRU -9.43% operation update.
• M7T -7.59% profit taking.
• CYP -5.22% sell off continues.
• KAR +3.72% deal signed.
• MOC +4.45% mortgage market improves.
• PNR +645% high-grade results.
• SYR -13.64% CS cuts price target by 43% but still 130c.
• ING +3.77% finally some buyers. Citi upgrades.
• PDL -1.12% MS upgrade.
• Speculative stock of the day: Cash Converters (CCV) +30.00% Settlement of class action for $42.5m in two tranches.
• Biggest Risers: SWM, SGP, IFM, NCK, MLX and PAR
• Biggest Falls: WTC, TWE, PET, NHC, PGL. MSB, Z1P and SXL.

TODAY

• Treasury Wine Estate (TWE) –11.83% The man responsible for turning around the fortunes of TWE, from wine destroying basket case to market darling, is calling stumps. CEO Michael Clarke (no, not the cricketer) will retire in the September quarter of 2020. Chief operating officer, Tim Ford, will succeed him. Clarke will return to Britain upon his retirement to spend more time with family but will act as an adviser to TWE for an extra year in order to provide strategic support across and help deal with merger and acquisition opportunities.
• Stockland (SGP) +6.49% Q1 trading update; reaffirms FY20 guidance of flat FFO/security and DPS growth with payout at the bottom end of 75-85% ratio. The Residential/Retirement division remains on track to deliver over 5,000 settlements in FY20, including around 500 townhomes. Residential communities finished moderately above expectations with 1,149 net deposits taken and 4,245 contracts on hand. The company expects a greater Communities profit skew of around 65% to H2 this year, noting that that residential market cycle has improved, particularly in Sydney and Melbourne, and the southeast QLD is steadily improving.
• St. Barbara (SBM) – Confirms first quarter FY20 gold production of 87,569 ounces, at an AISC of $1,421/oz (Q4 FY19 AISC $1,219/oz). Full-year guidance reaffirmed. Last week SBM downgraded its production expectations for the financial year to 420,000oz.
• Seven West Media (SWM) – To sell Pacific Magazines to Bauer Media for $40m. The sale is expected to be completed by the end of the calendar year and is subject to ACCC approval. In addition, SWM will receive $6.6m of advertising on Bauer Media assets over three years.
• Afterpay (APT) –3.34% Has said while it is not currently subject to an RBA inquiry, it welcomes the opportunity as part of the central bank’s broad-based, periodic review of the payments industry next year.
• Lynas (LYC) +2.77% Quarterly update; sales revenue was strong at $99.1m, given volatile market conditions. Trade tensions continue to weigh, however, with sales volumes falling from 4,723 tonnes in Q4 FY19 to 4,186 in Q1 FY20. Limits imposed by the Malaysian government also took their toll on the company’s production, with neodymium and praseodymium production down 17.5% from the June quarter.
• Karoon Energy (KAR) +3.72% Signs a five-year deal with Shell West to trade and ship crude oil production from its Baúna field in Brazil, the agreement provides KAR with access to Shell West’s global marketing and shipping platform. Shell West has gained internal credit approval, for a US$50m term loan facility at Karoon’s Australian business level to be used as a reserve working capital facility.
• Costa Group (CGC) +0.29% There is speculation CGC will downgrade guidance due to pricing pressure for blueberries and mushrooms.
• WorleyParsons (WOR) –1.40 Reaffirms outlook for FY20, expects earnings to be weighted to the second half, similar to previous years. CEO Andrew Wood said the acquisition of Jacobs ECR had increased the company’s earnings resilience. The board also repeated its unanimous opposition to further creeping acquisitions by Dar Group at the company’s AGM.
• WiseTech (WTC) –12.33% Trading halt following another big drop today despite rebuttal as J Capital releases its second report as a reply to the rebuttal.

ECONOMIC NEWS

• Nothing significant today

BOND MARKET

• 2 – year bond yields up 2bps to 0.78%
• 3 – year bond yields up 3bps to 0.82%
• 10 – year bond yields up 5 bps to 1.15%

ASIAN NEWS

• Vice Premier says US/China making progress at tech conference at the weekend. Phase 1 looks doable.
• China’s home-price growth slowed for a fourth month in September. New-home prices, excluding state-subsidized housing, rose 0.53% last month from August in 70 major cities. Second-hand home prices saw Twenty-eight cities saw a drop in secondary house prices, the most in 3 1/2 years.

• Japanese exports fell for a tenth straight month in September, dropping at a sharper pace than forecast as shipments to China and South Korea slipped.
• Vietnam seeks to sustain economic growth next year at about 6.8% amid a forecast 7% rise in exports, Prime Minister Nguyen Xuan Phuc announced.

EUROPEAN AND US NEWS

• European markets set for as mildly positive open on Brexit vote hopes.
• 1215 days since the Brexit referendum. And still talking about it. Boris insists that the UK will be out by Halloween.
• Another day another vote for Brexit. Another delay? Another election?
• Jamie Dimon has called negative rates ‘irrational’. He is doing everything to avoid buying them US$17 trillion worth on the Planet.
• ‘Super Mario’ is heading for his victory lap with ‘whatever it takes’ and saving Greece part of his legacy.

And finally….

A woman gets on a bus with her baby. The driver says: “Ugh, that’s the ugliest baby I’ve ever seen.”

The woman walks to the rear of the bus and sits down, fuming. She says to the man next to her: “The driver just insulted me.”

The man says: “You go up there and tell him off. Go on, I’ll hold your monkey for you.”

Clarence

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